Corporate Governance

Corporate Governance and Exec Compensation 2021

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Page 27 of 71

Shearman & Sterling LLP 25 | ESG Continues to Find its Way into Incentive Compensation Plans Percentage Weighting of ESG Metrics as Part of Holistic Qualitative Review of Individual Performance Weighting of Individual ESG Metric 33 8 of the Top 100 Companies incorporate ESG metrics into a holistic qualitative review of individual performance of the Top 100 Companies include ESG as an individual metric (one company includes ESG as an element of a holistic qualitative review and also as an individual metric) 1 1 1 3 10 2 2 7 3 10 1 9 1 20% 15% 10% 5% Discretionary modifier 67% 50% 25 – 34% 20% 10% Discretionary modifier Percentage not specified ESG METRICS IN THE INCENTIVE COMPENSATION PLANS OF THE TOP 100 COMPANIES 41 surveyed companies incorporate ESG metrics into their executive compensation program of these companies include them in their annual plan 36 in both their annual plan and their long-term plan and 5 as part of their annual determination of total target compensation 5 Of the Top 100 Companies: ESG means different things to different companies. This is how companies that used ESG metrics defined ESG: 7 have ESG metrics that apply only to certain named executive officers or that are tailored for each named executive officer specifically reference a focus on diversity state that a focus on safety is a metric, up from five companies last year that stated that increasing the health and safety of their employees was a metric, and one of these companies specifically states that COVID-19 safety is a metric includes fixing disparities in the healthcare of underrepresented groups as a metric 27 17 1

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